Texas overpaid $12.5 million for EHR incentives, OIG says

The Texas Health and Human Services Commission (HHSC) made $377 million in Medicaid electronic health record (EHR) incentive payments to hospitals in 2011 and 2012, but at least $12.5 million of that was made in violation of state and federal regulations, according to a government watchdog agency's report.

In 2009, the Health Information Technology for Economic and Clinical Health Act (HITECH) established EHR incentive programs that allowed states to make federally funded incentive payments to hospitals that complied with state and federal EHR adoption requirements, including specific patient-volume reporting measures. The Office of Inspector General (OIG) reviewed 45 hospitals in Texas that received an incentive payment of $1.5 million or more, and found that although the HHSC instructed Texas hospitals not to include inpatient non-acute care services when calculating patient volume, the agency did not verify that those calculations were removed.

Additionally, the HHSC made incentive payments to hospitals that violated federal regulations, which exclude services such as rehab, psychiatric care and skilled nursing facility services when calculating payments.

The OIG recommended that the HHSC return the $12.5 million to the federal government and review incentive payments for hospitals beyond the 45 targeted by the OIG. Additionally, the watchdog agency recommended the state provide guidance regarding incentive payment calculations.

The HHSC did not agree or disagree, but said it would refund the $12.5 million following an independent post-payment audit.

The Texas HHSC is recovering from last year's 21CT debacle that exposed "operational defects" and organizational mismanagement within the agency and forced the resignation of two top state OIG officials.

The report also underscores ongoing concerns surrounding fraudulent EHR incentive payments, which prompted the OIG to begin conducting random nationwide audits of providers to ensure they had met meaningful use requirements. In June, the former chief financial officer of Shelby Regional Medical Center in Texas was sentenced to 23 months in prison and ordered to pay $4.4 million in restitution for falsely indicating the hospital had met the meaningful use requirements of the EHR incentive program.

For more:
- here's the OIG report

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